City Manager Addresses CP Rail Lease Questions

Owen Sound's city manager defended the handling of the former CP Rail Station property and dismissed conflict of interest concerns in a press conference yesterday.

About 50 people were on hand at the Temporary City Hall location at the Professional Centre Wednesday afternoon for Wayne Ritchie's address about the strategic goals and outcomes of the acquisition, renovation and lease of the heritage property at Owen Sound's east harbour.

"I'm thrilled with that building. I'm thrilled to have it on the market," Ritchie says. "It's going to be taxes, it's employing people, it's bringing people to our harbour front."

Ritchie says goals to be achieved through the lease were to maintain as many heritage features of the building as possible, use the property as an attraction and activity for harbour visitors and to encourage more private investment in the harbour area.

"Practical goal was to achieve all of the above with the least cost to the taxpayer as possible," Ritchie explains.

Ritchie broached the subject of conflict of interest concerns raised regarding city staff who have family members as shareholders in Mudtown Station.

"This happened after the lease and interaction with the city had been finalized," Ritchie explains. "City staff are subject to the Municipal Conflict of Interest Act. I believe the Conflict of Interest guidelines have been followed."

"I have complete confidence in the honesty and integrity of members of my senior management team."

Recent reports raised conflict of interest concerns involving a senior city staff member and city councillor in regards to ownership of Mudtown Station.

Distraught and fighting back tears, Director of Community Services Pam Coulter explained her role in the city's lease negotiations with Mudtown Station and assured her family did not have an interest in becoming shareholders in the business during that process.

Coulter says her family members first met with Mudtown Station operator Harold Kloeze in June and she immediately disclosed the potential private business interest to the city manager.

"Immediately, we sought a legal opinion in order to be sure that there was no conflict of interest," Coulter says. "I immediately proceeded to excuse myself from further dealings with this file."

Coun. Brian O'Leary, who is running for deputy mayor, also provided a statement to Bayshore Broadcasting to respond to reports implying a conflict of interest in his investment into Mudtown Station.

O'Leary says he bought into the business some 17 months after negotiations concluded and the lease was signed between the city and Mudtown Station in April 2017.

"Any suggestion that I made this investment on the basis of confidential information, or that I was able to influence the negotiation of the lease before investing is patently false," O'Leary says in a statement. "And I take great exception to my good name and reputation being attacked in this way."

"This is a good news story for our city and its residents -- one which I hope will be followed by many more successful public/private partnerships in our downtown," O'Leary continues. "Which is why I am so dismayed that I have to be here today to address the false allegations against me and my family."

The city purchased the former CP Station in 2010 for $150,000 with the goal to find a tenant and lease the building as a catalyst to waterfront re-development.

Ritchie says the building sat from 2010-14 with signage on it indicating it was available for rent, and no offers were received for the property.

An RFP was issued in 2014 by the city and received two responses.

The city pursued and structured a lease deal with Dr. Greg Zoldy, who ended up walking away from a proposed 20-year agreement in 2016.

The city then posted another RFP for the lease of the CP Station and in April 2017 council approved a 15-year agreement with Mudtown Station to operate a brew-pub.